Why Dominion audit is a good idea, says Dominion audit manager
The Dominion Group of Companies, a unit of the British Columbia government, has released a detailed report on the 2016-17 financial performance of the province’s Crown corporations, a series of audits that were carried out over a period of several years.
The Dominion report found that while Crown corporations in British Columbia are widely regarded as a success story in terms of public services and a reliable engine of economic growth, there are significant problems in how the Crown corporation system is being run.
“There are significant gaps in the Crown Corporations financial reporting, and the lack of transparency and accountability that exists in the system, according to the report,” the report says.
The report says the Crown corporations are failing to deliver on its commitments, such as its commitment to invest $150 million in a new health facility to treat patients with heart disease, the report said.
The $150-million facility is scheduled to open in 2021, but Dominion said it will not be ready until at least 2019.
In its audit, the auditor said the Crown Corporation is “overcomplicated and has a lack of coherent direction and direction is failing.”
“The Crown Corporation’s failure to meet its financial commitments and the inconsistent management of the corporation and its assets has resulted in financial losses that are difficult to quantify,” the audit said.
In fact, the audit found that the Crown is currently facing a net debt of $1.5 billion.
It is the second consecutive year the Crown Corp has faced a net deficit.
The province’s public debt has risen from $8.6 billion to $11.4 billion since 2014.
“The public debt is increasing because of the inability of the Crown to deliver, as is evidenced by its $1,964-million deficit in 2016,” the auditor’s report said, citing “unusual increases in debt as well as debt held by the Crown in trust and other assets.”
Dominion has also incurred an estimated $1-billion in legal and other costs related to the audit, according, the review said.
“While the Crown has made significant improvements in its financial reporting over the last few years, the province is still facing significant challenges in its ability to meet financial obligations, as outlined in the audit,” the review found.
“Furthermore, the Crown’s financial reports have been plagued by inaccurate statements, and this has resulted from the Crown not fully disclosing its financial position to the public.”
Dominion CEO John Grant said in a statement the audit was a “serious undertaking” and the “vital and timely” step to make the Crowns finances transparent and accountable.
“In response to this report, we have undertaken a detailed review of our financial reporting and have made changes to the way we report and assess our financial performance,” Grant said.
He said the auditor also found that there was a systemic lack of accountability in the way the Crown operates.
“We have also identified areas of concern, such that we believe the Crown should consider implementing new, independent oversight measures to ensure that the system is operating in a way that is sustainable and accountable to taxpayers,” Grant wrote in the statement.
The auditor said that while the Crown had been transparent about its finances for a number of years, its transparency was not consistent with how it was reported to the legislature.
The audit found the province has been “operating on an operating balance sheet” and has not been fully transparent about how its revenue is divided, how it allocates revenue to operating expenses, and how much of its revenue comes from sources other than taxes.
It also found the Crown failed to report the costs of the new health-care facility to the provincial auditor in an audit.
In a statement issued by the province last month, Grant said he was “very disappointed” with the findings and was “concerned about the impact that this may have on the accountability of our Crown corporation.”
“I’m pleased the auditor has made some progress, but there’s more work to do,” Grant added.
“What is clear is that our Crown Corporation system is failing to provide an effective and timely accounting system to the province, to Parliament and to the citizens of British Columbia.”
The review was released just days after Premier John Horgan released a statement on the issue, saying the Crown “has not made any significant progress” in delivering the promises it made in the 2015-16 provincial election.
He also said the Auditor General of Canada was conducting an investigation into the Crown.
Dominion’s latest financial results were released Wednesday, the day after Premier Horgan announced that the province will not pursue a second election.
In the first quarter of this year, the state-owned utility’s net income was $865 million.
That is down from $1 billion in the first nine months of the year.
Dominion had a net loss of $724 million in the same period.
The company’s stock price dropped from $42.24 to $27.11 on Wednesday.
Dominion has had a financial crisis in recent years, as its share prices have dropped in recent weeks, with the stock market index